Dublin airport is in the running to be Air India's new European hub for the airline's US-bound flights as the carrier mulls ditching its current base at Frankfurt.

While a final decision is still likely to be a number of weeks away, should Air India choose Dublin it will use the new Terminal 2 due to open in November.

That would be a major coup for the Dublin Airport Authority (DAA) which, having spent over €600m on the controversial facility, is having to cope with significant falls in passenger traffic at the airport.

Using T2 would enable the Air India's passengers to clear US immigration and customs in Dublin, effectively allowing them to enter the United States as domestic travellers. Air India representatives visited Dublin airport's T2 last month to assess its potential.

A spokesman for the DAA declined to comment yesterday.

However, airline industry speculation cites three other European airports being weighed up by Air India -- Copenhagen, Vienna and Madrid.

Clearance

But none of the three has full US clearance facilities such as those at T2. By the end of the year, Dublin and Shannon will be the only two European airports to offer such a service.

Loss-making Air India would also be able to pick up passengers at Dublin airport, either for continuation to the United States, or to India, although the level of such additional business would certainly be low. That could diminish the chance of Dublin being chosen by Air India, which would be able to access higher levels of additional traffic at bigger European cities.

Air India currently routes five aircraft a day through Frankfurt. Three of those arrive from India -- from Delhi, Mumbai and Ahmedabad, while two arrive from the United States, from Chicago and Newark.

Air India has only been using Frankfurt as its west-bound hub for a year. Just last week, the airline's regional manager for Europe, Ratan Bali, said Frankfurt had played a crucial role in helping the carrier cope with last year's slump in international air travel. It's thought Air India wants to find a cheaper European airport to use as it tries to cut costs, however.

The DAA is poised to hike its passenger fees by as much as 33pc once T2 opens at the end of this year. The new terminal will cost as much as €46m a year to run.